A bullish earnings play in Centene

optionMONSTER's Heat Seeker monitoring program detected the purchase of 3,119 March 47.50 calls for $0.90 and the sale of an equal number of March 37.50 puts for $0.45. Volume was more than twice open interest at both strikes.

The investor now stands to make money on the long calls if the stock rallies but will face potential losses in the event of a drop. While similar to owning shares, the main difference is that the position will track movements in the company less closely as time passes and expire worthless if it remains between $37.50 and $47.50.

The trader is probably using the strategy as an inexpensive bullish bet because selling the puts lowered the entry price to just $0.45. He or she will now profit from a sharp rally, which could occur if the quarterly results are strong. (See our Education section)

CNC is down 0.92 percent to $43.40 in afternoon trading. The provider of health-care benefits climbed more than 50 percent last summer after a big drop but has been trapped in a range since.

Today's bullish trade pushed total option volume to 14 times greater than average, according to the Heat Seeker.